The dearness allowance (DA) for Central government employees is finally being amended after more than a year and a half of delay. Following ratification by the Union Cabinet, the DA will increase by 3% beginning April 1, 2022. As a result, the DA for Central government employees would now be 34% of their base income.
The dearness allowance is the government’s approach of assisting its employees in coping with rising prices and protecting them from inflation’s negative impacts. Employees’ DA fluctuates based on whether they live in metropolitan areas, semi-urban areas, or rural India, since the effect of inflation varies from place to place.
All Central government employees and pensioners would benefit from the increase in DA and dearness relief (DR). The rise follows the formula suggested by the Seventh Central Pay Commission, and it goes without saying that it will put more strain on the government’s finances. Every year, more than Rs 9,000 crore will be spent on DA and DR payments. Over 47 lakh Central government employees and 68 lakh retirees will benefit from this.
This increase had been postponed due to the pandemic. After a long interval, the DA and DR for Central government personnel were raised to 28 percent in July of last year, up from 17 percent previously. In October of last year, another three percent increase was announced, bringing the DA and DR to 31% of basic salary.